Andorra Passive Residence

Andorra's passive residence now costs EUR 1,000,000 in Andorran assets, or EUR 400,000 placed in the national Housing Fund, plus a non-refundable EUR 50,000 payment to the State and EUR 12,000 for each dependant, following the reform enacted by Llei 2/2026 and in force since 13 February 2026. In return you receive a renewable residence authorisation in a Pyrenean principality with a personal income tax rate of 10 per cent, and an obligation to live there for at least 90 days a year.

The programme's formal name is the autorització de residència sense activitat lucrativa, residence without gainful activity, known locally as passive residence or procedure D.1. It is administered by the Government of Andorra through the immigration service of the Ministry of Justice and Interior, while the statutory payment is made to the Autoritat Financera Andorrana (AFA), the financial regulator, which passes it to the finance ministry once the authorisation is granted.

What passive residence does, and does not, give you

It gives you residence, not citizenship. The initial authorisation runs for two years and is then renewed for successively longer terms, provided the investment, income, accommodation, health cover and annual presence are maintained. Your spouse and dependent children can be included.

It does not give you the right to work or run a business in Andorra; that requires a different, active residence category. It does not give access to CASS, the public social security and health system, so private medical cover valid in Andorra is compulsory. And because Andorra is outside the European Union and outside the Schengen Area, the Andorran residence card confers no right to live in France, Spain or any other EU state. You continue to travel on your existing passport. For investors whose objective is an EU residence permit, a programme such as the Portugal Golden Residence Permit answers a different question.

What changed in 2026

Llei 2/2026, published in the Official Bulletin (BOPA) on 12 February 2026, rewrote article 96 of the Immigration Act. Three changes matter. The standard investment rose from EUR 600,000 to EUR 1,000,000. A reduced EUR 400,000 threshold now applies to money placed in the Fons d'Habitatge, the Housing Fund. And the sum paid to the AFA, previously a refundable guarantee deposit, became a definitive payment that belongs to the State. It is returned only if the initial authorisation is refused.

A practical warning: at the time of writing, the government's own online procedure page still shows the pre-reform figures. The statute governs, and it is the statute we quote here.

The two investment routes

• Andorran assets, EUR 1,000,000. The investment may be spread across Andorran real estate, shares in or own funds of Andorran-resident companies, debt instruments and collective investment funds issued by Andorran entities, Andorran public debt, life assurance contracted with Andorran-resident insurers, and non-remunerated deposits at the AFA. Two constraints catch people out. Holdings in Andorran debt instruments and funds count for a maximum of 36 months, after which the money must move into another eligible class. And where you buy property, more than EUR 800,000 must be applied to each unit acquired. That is a floor per property inside the EUR 1,000,000 total, not a separate or cheaper route.
• Housing Fund, EUR 400,000. The reduced threshold applies when the investment is made, directly or indirectly, permanently and effectively in the Fons d'Habitatge, which channels capital into Andorra's housing supply. It is the lowest-capital route, but it is not a property purchase and does not give you a home.

In both cases the investment must be maintained for as long as you hold the residence. The investment threshold does not rise with family size; the payments to the State do.

What it actually costs

On top of the investment, the principal holder pays EUR 50,000 to the AFA, and a further EUR 12,000 for each dependant who becomes a resident. For a couple with two children on the Housing Fund route, that is EUR 400,000 invested plus EUR 86,000 in payments to the State. These payments are not credited against the investment and are not recoverable. The statute speaks of "persons in your charge" without listing them, so whether dependent parents attract the same EUR 12,000 is being confirmed and is excluded from our calculator. A separate government application fee applies; its current post-reform amount is being re-verified. Budget also for property transfer taxes and notary costs if you buy, private health insurance, and professional fees.

The requirements that trip people up

• Presence. You must make Andorra your principal and effective residence for at least 90 days in each year. That is light by European standards, but it is a real obligation, checked at renewal.
• Income. Separately from the capital, you must show annual income from outside Andorra of at least 300 per cent of the Andorran minimum wage, plus a further 100 per cent for each dependant. The capital proves you can invest; the income proves you can live there without working.
• The six-month window. You commit to completing the investment within six months of applying, extendable by six months only for force majeure or a third party's fault. If it is not evidenced in time, the authorisation is annulled.
• A real home. You need a genuine domicile in Andorra, owned or rented, in one of Europe's tightest housing markets. On the Housing Fund route, that home is an additional cost.
• Source of funds and record. A clean criminal record is required, and the origin of the capital will be scrutinised. Prepare the documentary trail before you apply, not after.

Tax

Andorra's personal income tax (IRPF) is levied at a single rate of 10 per cent, with a personal allowance that leaves the first EUR 24,000 of general income exempt and a reduced effective rate on part of the income above it. Certain long-held gains, including qualifying shareholdings and foreign property held for at least ten years, are exempt under the IRPF law. There is no wealth tax and no inheritance or gift tax.

Two cautions. Holding passive residence is not the same as being Andorran tax resident: tax residence depends on days spent and where your centre of economic interests lies, and your home country may continue to claim you. And Andorra exchanges financial information under the OECD Common Reporting Standard. This programme rewards genuine relocation, not paper residence.

Permanent residence and citizenship

Andorra has no fast track to nationality. Naturalisation is measured in decades of residence rather than years, and Andorra does not, as a rule, allow its naturalised citizens to keep their previous nationality. Passive residence should be chosen as a residence and tax solution in its own right. If a second passport is the goal, the citizenship by investment programmes are the relevant comparison.

Who it suits, and who it does not

Andorra suits the financially independent investor, often retired or living on portfolio income, who wants a safe, well-run, euro-using base in the mountains between France and Spain, a low and simple tax system, and is prepared to live there for a meaningful part of each year.

It is a poor fit for anyone who needs to work locally, wants EU or Schengen residence rights, seeks citizenship within a practical horizon or is looking for the lowest possible total outlay, since the 2026 payments to the State are a sunk cost. Compare it properly against the alternatives in our guide to the best golden visa and residence programmes, including Malta's Global Residence Programme.

If Andorra is on your shortlist, Mirabello Consultancy can model the exact cost for your family, stress-test the income and presence requirements against your circumstances, and coordinate the application with Andorran counsel. Book a free, confidential consultation.